The automotive industry has traditionally been a key indicator of world economies. We’re seeing a technological miracle and a drastic economic change by moving from gas-powered cars to electric vehicles (EVs). The EV revolution is making our roads more electric, boosting job markets, attracting investments and creating unprecedented partnerships between industries.
Educating the public continues to be one of the most significant challenges in the EV sector. Here are some key points:
Revival of the Manufacturing Sector
- Battery Production: The battery is the heart of an electric vehicle. As the demand for EVs grows, so does the demand for high-quality, energy-efficient batteries. This demand has increased for battery manufacturing and remanufacturing facilities. Cox Automotive employs thousands related to the remanufacturing, reuse and recycling in the EV battery lifecycle across multiple locations in Belleville, MI, Las Vegas, Oklahoma City, and Ede, Netherlands. Brian Skalovsky, director of Battery Recycling for Cox Automotive, sees the development of environmentally friendly battery recycling methods as an ethical imperative. “This is about being part of something special and leaving the next generation a better planet,” Skalovsky says.
- Vehicle Assembly: Traditional vehicle assembly lines are being reconfigured for EV production. While amid a strike by the UAW, EVs are expected to preserve existing jobs and create new ones, especially as brands expand their EV offerings. For example, in 2021, General Motors announced a goal of going primarily electric by 2035. Ford’s shift to electrification started with its two biggest icons, the Mustang and F-150. In August 2023, Ford’s Mustang Mach-E became the second-best-selling electric SUV in the U.S., and Ford aims to produce 2 million EVs per year by 2026.
- Specialized Components: Unlike gasoline vehicles, electric vehicles require specialized components ranging from electric drivetrains to onboard electronics. This has resulted in the establishment of new production hubs dedicated solely to the needs of electric vehicles. For example, Honda announced in March 2023 that it would consolidate two assembly lines in Marysville, OH, to retool for EV production and components.
Advancements in Infrastructure and Beyond
- Charging Stations: As EVs become more common, there is a greater need for charging infrastructure. It is not only necessary to establish charging points but also to maintain and update them. For example, Manheim released an initiative called “Electrify Manheim” in 2021, which positioned Manheim to handle the increasing volumes of EVs. As part of this program, Manheim installed charging stations at its auction locations, allowing the simultaneous charging of a few hundred vehicles to help optimize the process and flow of EVs across the lots. As of September 2023, Manheim had installed 800 charging stations across their locations, and they plan to expand, adding 300 stations over the next three years.
- Research & Development: The hunt for innovation intensifies as the EV business increases. Whether it’s longer battery life, faster charging or improved vehicle performance, EVs will attract top talent, and automakers, suppliers and other investors are investing billions to establish themselves as the leading EV players of the future, according to a report by StockApps.
Challenges in the EV Landscape
- Charging Complexities: Electric vehicles have great potential but are not without their unique problems. Charging an EV takes longer than filling a gas car, and accessible charging infrastructure can be a major issue for many, especially urbanites and those without dedicated parking. Many countries’ electric grids are unprepared for rapid EV adoption. This lack of preparedness could lead to power outages and system instability as more people plug in their cars.
- Mining for Materials: Mining lithium, used in most electric vehicle batteries, is environmentally damaging. Obtaining virgin lithium from mines in certain geopolitically fraught locales also presents ethical problems since most laborers work in less-than-optimal conditions. While EVs are cleaner than fossil fuels, seeking alternatives for sustainable and equitable battery production is essential.
What We Can Learn From Early Adopters
- Norway: Considered the leader in early EV adoption, most of Norway’s new-car sales are EV only. “In 2022, 79.3% of new cars sold in Norway were EVs,” according to Christina Bu, secretary general of the Norwegian Electric Car Assn. Subsidies, lower parking, tolls, ferry tickets and the opportunity to use the bus and taxi lanes on numerous roadways are among the many benefits they enjoy. By cutting oil imports and boosting local investments in EV infrastructure, Norway decreased its carbon footprint while boosting its economy.
- California: One in four new cars sold in California last quarter were EVs, an all-time high, the Los Angeles Times reported in August 2023. As part of the state’s plan to reduce greenhouse-gas emissions, policymakers have long targeted the sale of electric cars using tactics such as stricter emission regulations and incentives for EV buyers.
- China: A global manufacturing giant, China embraced the EV revolution early on. Because of strict rules, the country has seen growth in EV manufacturers, battery makers and charging infrastructure providers. According to Bloomberg, six of the top 10 EV battery makers are Chinese. China exported 1.07 million vehicles in the first quarter of 2023, surpassing Japan as the world’s largest car exporter.
The EV movement isn’t just about making the air cleaner and making new kinds of cars. It is an all-around economic driver that will bring about a new era of growth, jobs and global competitiveness. As governments and businesses adapt to this change, the economy will grow, benefiting owners and society.
Stephanie Valdez Streaty (pictured above, left) is director of industry insights for Cox Automotive. She is responsible for research and analysis specializing in the transition to electric vehicles. Her focus is providing insights to clients and the industry on key trends impacting electrification. Stephanie graduated from Stanford University with a bachelor’s degree in sociology and organizational development.
